Monthlyish Funds For Fun Update
Hi Everyone! To be transparent, I will share monthlyish updates of my “Funds For Fun” portfolio account that I hold on M1 Finance. I treat this account as a super high total return savings account. I use an M1 finance account (Sign up today and get $10 for free!) because it is easy. I set up a draft rule that pulls in the amount of money that I want it to, what day, and the frequency. I will use this fund to help pay a down payment on a car or house, and any other future expenses. Instead of getting a 1-2% yield/return, I hope to get an 8-12% return.
You can check out this Googlesheets link to see which companies I invest in, which ETFs my finance invests in, my Roth 401 allocation, and my “Funds for Fun” portfolio that I am using to pay for future expenses. You can also check this website called Track Your Dividends (I am not a sponsor, but use and enjoy their product) to freely track the dividends of companies you invest in. You can create multiple portfolios, and see the future value, diversification, and next upcoming payment of your portfolio. This is the main website I use to track my annual income and the future value of my portfolio. Sign up for free and effort start to track your portfolio. This link will send you to my fiancée and I’s holdings, 401k, and Funds For Fun account to see what we invest in and dividend income.
In each update, I will go over my current mindset, any buys or sells, reasons for why I bought or sold certain stocks, the future mindset of the stock market, and visual graphics of my Funds For Fun holdings.
If you are interested in how I made these graphs of my portfolio, check out my Patreon page (click page)! I have multiple financial tools including an investment return calculator, budget rules, Financial Independent Retire Early calculator, ETF/stock portfolio stock calculator, time-weighted return tool, portfolio dashboard, and more! I help develop these tools to morph around your financial goals!
Alex Funds For Fun Portfolio Updates
Current Mindset
My Funds For Fun hyper-growth has done what it should do, grow at ridiculous rates. My time-weighted return (as of June 23rd, 2023) since the start of November 2022 is 19.13% vs the S&P 500 (SPY) at 16.31%. Which is insane! However, I do attribute this outlandish growth to that technology has outperformed the rest of the market. My money-weighted return, given by M1 Finance, is 15.36%. Which is again, crazy performance given the current stock environment.
The hitters in my portfolio have been, as of June 23rd, 2023, Amazon up by +40.32%, Vanguard Information Technology ETF up +23.31%, S&P Global up +15.75%, and NASDAQ QQQ ETF up +15.10%. The swings and miss in my portfolio have been Dollar General down -9.96%, MSCI down -8.55%, and Broadcom -5.06%. Dollar General and MSCI took major L’s in the last few months, and I have taken the opportunity to grab as many fractional shares.
Technology over the last 6 months is performing at 37.8%, communication services at 35.46%, and consumer discretionary at 24.82%! Given the federal rate, housing market crisis, debt ceiling doom, and much more, one would think these sectors would crumble, but no. It is the consumer staples, healthcare, and energy sectors that are underperforming.
With the wedding paid off, I am investing $120 into this portfolio each week. I hope to use this portfolio to put a downpayment on a house, beach condo, or car. However, there are major updates to the portfolio.
The Buys and Sells
The Buys
Boy or boy has my portfolio changed since I last published an update. I bought as much as possible in Dollar General, MSCI, and Ulta Beauty when their stock price fell. I am currently buying seven new companies, three of them which I have already bought. In the second week of June, I bought Intuit, Broadcom, and Fair Iassac. This is the technology portion of my portfolio. One of the cool things about M1 finance is that it automatically balances your portfolio by buying underweight stocks. So, M1 started with technology!
In the next following weeks, M1 will also buy Cintas, Old Dominion Freight Line, O’Reilly Automotive, and UnitedHealth Group.
The Sells
No Sells!
Why I Bought and Sold
Why Did I Buy It?
This is a two-part answer, with the second part explained at the end. Primarily I felt that I was over-concentrated in individual stocks. I felt the pain when MSCI, ULTA, and DG dropped into the red. Dollar General dropped over -19.00% in one day, and even allocating DG at 6.00%, that dip in the red majorly affected the portfolio’s performance.
Not getting too into the nearby side of things, yet, I am buying Intuit (INTU), Broadcom (AVGO), Fair Isaac (FICO), Cintas (CTAS), Old Dominion Freight Line (OFDL), O’Reilly Automotive (ORLY), and UnitedHealth Group (UNH) to diversify and add more growth to the portfolio. I am comfortable adding these stocks to the Funds For Fund portfolio because I understand the business, how they make money, and some have used their products. CTAS was the only stock I was unfamiliar with. After doing some research, I think it is a nice addition to the portfolio and a good company due to its wide MOAT.
Why Did I sell?
No Sells!
Future Mindset of the Stock Market
Headline inflation is coming down, but core inflation (like headline inflation excludes items subject to volatility like food and energy) remains sticky in the 5% range. This does concern me, as it suggests that we could enter a period of stagflation, which is no bueno. Stagflation will enable the Federal Banks to keep Rates high, punishing Americans with higher living costs, massive corporate job firings (You’re Fired!), and slower economic growth.
The debt ceiling bill passed, thank god, but this certainty that the US does not default on its debt will only last us until 2025. Where we will again watch US Congress hash out another deal and wait until the very last minute to pass it. Both sides have a got piece of the value, but the worrying part is that the deal limits US spending. This will limit growth in the US economy and therefore also most US companies.
The Federal Bank says it will raise interest rates two more times by the end of this year. If that is the case, I think the stock market might turn volatile. Even worse, the next GDP report could by technical terms put the US economy into a recession. Even though, we are already in one. Seems like everyone has a definition of what a recession is.
In the short term, 1-2 years, since my portfolio is focused on growth, performance is likely to be affected by the decisions of the Federal Bank and the Government. Long-term wise, in 3-7 years, the events that happen in the next few are likely to have lingering effects on the performance of the portfolio. However, this is why I love dollar cost averaging (DCA); whether the market skyrockets are drops like a rock, I am averaging in on the ups and downs. I don’t have to worry about timing the market. It calms my anxiety about investing and keeps me motivated to invest each week.
| Current Portfolio Allocation | Past Portfolio Allocation | ||
|---|---|---|---|
| Name | Percentages | Name | Percentages |
| Vanguard Information Technology ETF | 25.00% | Vanguard Information Technology ETF | 25.00% |
| Invesco QQQ Trust Series 1 | 13.00% | Invesco QQQ Trust Series 1 | 12.00% |
| Amazon | 5.00% | Visa | 9.00% |
| S&P Global | 5.00% | Starbucks Corp. | 7.00% |
| Visa | 5.00% | Texas Roadhouse Inc | 6.00% |
| Fair Isaac Corp | 5.00% | Dollar General Corp. | 6.00% |
| Berkshire Hathaway Inc | 3.50% | MSCI | 6.00% |
| Texas Roadhouse Inc | 3.25% | S&P Global | 6.00% |
| Ulta Beauty, INC | 3.25% | Northrop Grumman | 6.00% |
| Northrop Grumman | 3.25% | Berkshire Hathaway Inc | 6.00% |
| Starbucks Corp. | 3.25% | Ulta Beauty, INC | 5.00% |
| MSCI | 3.25% | ||
| Dollar General Corp. | 3.25% | ||
| Cintas Corp. | 3.25% | ||
| Old Dominion Freight Line Inc | 3.25% | ||
| O’Reilly Automotive Inc | 3.25% | ||
| UnitedHealth Group Inc | 3.25% | ||
| Intuit Inc. | 3.00% | ||
| Boadcom, Inc. | 3.00% | ||
Current Income and Portfolio Allocation
As you can see both from the table above and the charts below, my allocation and holdings have changed dramatically. I have and will buy into 8 new companies: Intuit (INTU), Broadcom (AVGO), Fair Isaac (FICO), Cintas (CTAS), Old Dominion Freight Line (OFDL), O’Reilly Automotive (ORLY), UnitedHealth Group (UNH). I am very excited about the direction this portfolio is heading towards and think this will easily (or I so hope so) beat the S&P 500 in the next 5 years. The new companies provide me the extra potential for growth but allow me to have less risk since no company is above 5%.
Some of the new companies, like AVGO, will increase my annual dividend income, as it is now at $46.57 for 2023. I am not interested in the dividend yield for this portfolio, but hey, extra cash is always nice!
Previous Portfolio Allocation
Current Portfolio Allocation
Why Did I Add New Companies and Change Up My Portfolio?
I wanted companies that have a wide MOAT, are not affected by outside forces such as the federal rate or economic decisions by US Congress, and companies that are focused on growth. Don’t get me wrong, my previous portfolio had all of that, but after a while, I didn’t feel comfortable with individual holdings being more than 5%. Using my Patreon Tool, the Stock and ETF portfolio Calculator (on my Patreon Page!), I found companies that fit my needs.
Looking at the table below, the portfolio’s 10-year annualized return was exactly what I wanted. Also, all individual stocks are allocated below 5% to reduce risk over long periods. I am using Vanguard’s technology ETF and QQQ as my core, with Amazon, S&P Global, and FICO at 5%. The rest of the companies are allocated between 3-3.5%. The current setup has a 10-year annualized return of over 20%. Now, I don’t expect this return in the next 5-10 years, however, I can reasonably expect this portfolio will have annualized returns higher than the S&P 500.
Another reason for the change was to increase my dividend growth rate. Who knows, I might not ever use the money from my portfolio in the next 10 years, but I might use the dividends from the portfolio to fund a vacation or emergency cash! Having a dividend growth rate of over 10% gives me ultimate flexibility.
You may notice that the 4-year dividend average yield is low, around 0.8%. Yes, I am aware that I won’t get much cash from my portfolio. I am okay with that! It is what I call being tax efficient. I don’t want to pay more in taxes because I have a portfolio with a high dividend yield. It does not make sense as the goal for this portfolio is to grow, not accrue income. Plus, from my experience, companies with a lower dividend yield tend to grow faster but also increase their dividends at greater rates, which is perfect for my Funds For Fun overall goal!
The way I backrest to see if the allocation is right and the companies I pick align with my goals is to use the Stock and ETF Portfolio Calculator that I created! I put in my current portfolio value, and have a sum-product function to find the portfolio’s average 10-year annualized return rate, 3/5 average dividend growth rate, and 4-year average dividend yield. Starting the portfolio value at around $5,200, investing $480 per month, an annual contribution of $5,760, at the end of 5 years my portfolio value would be around $56,000! What about 10 years? At the end of 10 years, my portfolio value would be $191,000!!! I hope that’s enough for a down payment on a house or beach condo! I also at the same time get some cash during this time to help pay for other things I choose not to reinvest the dividends.
Thank you for reading! Click the Land of Blogs for me reads or hit the home page to browse around!
| Ticker | Capital Appreciation | Dividend Growth 3, 5, 10 year avg | 4-year avg Dividend | Percentages | Capital Appreciation | Dividend Growth | 4-year avg Dividend |
|---|---|---|---|---|---|---|---|
| AMZN | 22.75% | 5.00% | 20.46% | 10.69% | 0.80% | ||
| AVGO | 31.77% | 21.64% | 3.23% | 3.00% | |||
| BRK.B | 12.38% | 3.50% | |||||
| CTAS | 26.95% | 22.47% | 1.01% | 3.25% | |||
| DG | 17.77% | 17.98% | 0.79% | 3.25% | |||
| FICO | 32.04% | 5.00% | |||||
| INTU | 22.70% | 14.24% | 0.63% | 3.00% | |||
| MSCI | 19.11% | 25.79% | 0.83% | 3.25% | |||
| NOC | 18.38% | 10.24% | 1.56% | 3.25% | |||
| ODFL | 26.85% | 35.00% | 0.33% | 3.25% | |||
| ORLY | 23.57% | 3.25% | |||||
| QQQ | 17.05% | 10.53% | 0.64% | 13.00% | |||
| SBUX | 14.70% | 12.03% | 1.88% | 3.25% | |||
| SPGI | 21.21% | 14.25% | 0.83% | 5.00% | |||
| TXRH | 19.57% | 16.15% | 1.55% | 3.25% | |||
| ULTA | 18.05% | 3.25% | |||||
| UNH | 23.31% | 16.13% | 1.35% | 3.25% | |||
| V | 19.50% | 16.21% | 0.62% | 5.00% | |||
| VGT | 18.53% | 6.65% | 0.92% | 25.00% |
| Time Passed (Years) | Current Portfolio Value | Annual Contributions | Price PerShare | Shares Owned | Dividend Yield | Dividend Per Share | Yearly Dividend | Year to End Total Shares | New Balance | Total Invested |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $11,060.00 | $5,760.00 | $100.00 | 110.60 | 0.80% | $0.80 | $75.41 | 111.35 | $11,135.41 | $11,060.00 |
| 2 | $16,953.01 | $5,817.60 | $120.46 | 159.52 | 0.74% | $0.89 | $120.39 | 160.52 | $19,336.44 | $16,877.60 |
| 3 | $25,212.21 | $5,875.78 | $145.11 | 200.84 | 0.68% | $0.98 | $167.78 | 202.00 | $29,311.89 | $22,753.38 |
| 4 | $35,246.42 | $5,934.53 | $174.80 | 235.75 | 0.62% | $1.09 | $218.01 | 237.00 | $41,427.75 | $28,687.91 |
| 5 | $47,421.63 | $5,993.88 | $210.57 | 265.25 | 0.57% | $1.20 | $271.52 | 266.54 | $56,125.28 | $34,681.79 |
| 6 | $62,179.10 | $6,053.82 | $253.65 | 290.19 | 0.53% | $1.33 | $328.81 | 291.49 | $73,936.42 | $40,735.61 |
| 7 | $80,050.78 | $6,114.36 | $305.56 | 311.28 | 0.48% | $1.48 | $390.42 | 312.55 | $95,502.42 | $46,849.96 |
| 8 | $101,677.92 | $6,175.50 | $368.08 | 329.11 | 0.44% | $1.63 | $456.94 | 330.36 | $121,596.20 | $53,025.46 |
| 9 | $127,833.45 | $6,237.25 | $443.39 | 344.21 | 0.41% | $1.81 | $529.01 | 345.41 | $153,149.36 | $59,262.72 |
| 10 | $159,448.99 | $6,299.63 | $534.11 | 357.00 | 0.37% | $2.00 | $607.33 | 358.13 | $191,284.73 | $65,562.34 |
| 11 | $197,647.35 | $6,362.62 | $643.40 | 367.83 | 0.34% | $2.22 | $692.68 | 368.91 | $237,355.47 | $71,924.97 |
| 12 | $243,781.72 | $6,426.25 | $775.05 | 377.02 | 0.32% | $2.45 | $785.90 | 378.03 | $292,992.36 | $78,351.22 |
| 13 | $299,482.87 | $6,490.51 | $933.64 | 384.81 | 0.29% | $2.71 | $887.92 | 385.76 | $360,160.61 | $84,841.73 |
| 14 | $366,716.02 | $6,555.42 | $1,124.68 | 391.43 | 0.27% | $3.00 | $999.78 | 392.32 | $441,228.36 | $91,397.15 |
| 15 | $447,849.33 | $6,620.97 | $1,354.80 | 397.05 | 0.25% | $3.33 | $1,122.60 | 397.88 | $539,049.28 | $98,018.12 |
| 16 | $545,736.46 | $6,687.18 | $1,632.01 | 401.84 | 0.23% | $3.68 | $1,257.63 | 402.61 | $657,061.92 | $104,705.30 |
| 17 | $663,815.97 | $6,754.05 | $1,965.95 | 405.91 | 0.21% | $4.08 | $1,406.23 | 406.63 | $799,409.56 | $111,459.35 |
| 18 | $806,231.15 | $6,821.59 | $2,368.21 | 409.39 | 0.19% | $4.51 | $1,569.94 | 410.05 | $971,084.49 | $118,280.95 |
| 19 | $977,974.30 | $6,889.81 | $2,852.78 | 412.35 | 0.18% | $4.99 | $1,750.41 | 412.97 | $1,178,101.87 | $125,170.76 |
| 20 | $1,185,060.58 | $6,958.71 | $3,436.50 | 414.89 | 0.16% | $5.53 | $1,949.50 | 415.45 | $1,427,709.16 | $132,129.46 |
| 21 | $1,434,737.46 | $7,028.29 | $4,139.66 | 417.06 | 0.15% | $6.12 | $2,169.26 | 417.58 | $1,728,638.44 | $139,157.76 |
| 22 | $1,735,737.02 | $7,098.58 | $4,986.70 | 418.91 | 0.14% | $6.77 | $2,411.94 | 419.40 | $2,091,410.34 | $146,256.34 |
| 23 | $2,098,579.90 | $7,169.56 | $6,007.05 | 420.51 | 0.12% | $7.50 | $2,680.03 | 420.96 | $2,528,700.21 | $153,425.90 |
| 24 | $2,535,941.47 | $7,241.26 | $7,236.18 | 421.88 | 0.11% | $8.30 | $2,976.30 | 422.29 | $3,055,779.23 | $160,667.16 |
| 25 | $3,063,092.91 | $7,313.67 | $8,716.82 | 423.06 | 0.11% | $9.19 | $3,303.80 | 423.44 | $3,691,045.79 | $167,980.83 |
| 26 | $3,698,432.60 | $7,386.81 | $10,500.41 | 424.08 | 0.10% | $10.17 | $3,665.90 | 424.43 | $4,456,665.60 | $175,367.64 |
| 27 | $4,464,126.27 | $7,460.68 | $12,648.95 | 424.96 | 0.09% | $11.26 | $4,066.35 | 425.28 | $5,379,342.87 | $182,828.31 |
| 28 | $5,386,878.15 | $7,535.28 | $15,237.11 | 425.72 | 0.08% | $12.46 | $4,509.26 | 426.02 | $6,491,249.28 | $190,363.60 |
| 29 | $6,498,859.92 | $7,610.64 | $18,354.85 | 426.38 | 0.08% | $13.79 | $4,999.21 | 426.65 | $7,831,143.04 | $197,974.23 |
| 30 | $7,838,829.78 | $7,686.74 | $22,110.53 | 426.95 | 0.07% | $15.27 | $5,541.26 | 427.20 | $9,445,716.97 | $205,660.98 |
